BREAKING: Spain’s Glovo to exit four markets, including Egypt
Spanish startup Glovo announced on Tuesday it is exiting four markets; Egypt, Turkey, Uruguay and Puerto Rico, as part of a goal of pushing for profitability by 2021.
Glovo said its app will continue to function in the four markets “for a few weeks” after today — adding that it is offering “support and advice to couriers, customers, and partners throughout this transition”.
The exits mean its app footprint will shrink to 22 markets, with a focus on South America, South West Europe, and Eastern Europe, and Africa. Glovo will be withdrawing from eight out of a total 306 cities.
The announcement indicates that Glovo is saying goodbye to the Middle East, despite its recent late stage financing round being led by Abu Dhabi state investment company, Mubadala.
In 2018, Glovo entered Egypt, where activities were limited to the capital Cairo and Alexandria, the second-largest city.
Glovo’s exit from Egypt marks the end of a second act in the market. It first announced it was pulling the plug on Egypt in April 2019 — but returned last summer, at the behest of its investor Delivery Hero, a rival food delivery startup which has a stake in Glovo, according to co-founder Sacha Michaud’s explanation during the press conference.
“This has been a very tough decision to take but our strategy has always been to focus on markets where we can grow and establish ourselves among the top two delivery players while providing a first-class user experience …” CEO Oscar Pierre, told reporters.
“Leaving these four markets will help us to further strengthen our leadership position in South West and Eastern Europe, Latin America, and other African markets, and reach our profitability targets by early 2021,” Pierre added.
Glovo also said the eight cities collectively generated 1.7 percent of its gross sales in 2019, signaling that the move does not amount to a major revenue hit.
Asked about Egypt, a Glovo spokesperson told TechCrunch: “Egypt has been a very complex market for us, we were sad to leave the first time and excited to return when we did so last summer.
“However, our strategy has always been to be among the top two delivery players in every market we enter and have a clear path to profitability. Unfortunately, in Egypt there is not a clear path to profitability.” he added.
Glovo is profitable on a per unit economics basis in “some countries”, Michaud said but admitted it “varies a lot country by country”.
Spain and Southern Europe are the best markets for Glovo, Michaud told TechCrunch, confirming it generates operating profit there. “Latin America will become operation profitable next year,” he predicted.